All Forum Posts by: Robert Mayo

The title policy guarantees that you own it.

Without such a policy it is possible the guy selling it to you does not own it, or perhaps the guy he bought it from didn't really own it. If either ends up being true you won't own the property, and you don't get your money back either.

I'm new here, but I did read the long 2008 thread on appreciation, aside from some of the more flaming parts.

I'm very pleased to learn the rules-of-thumb for cash-flow, like the 2% rule and that expenses are 50% of rent, and that you should buy low enough that you have instant equity. All good, I'm learning a lot.

However, I'm quite surprised there isn't more discussion about the location of properties. Does location not matter? $1,000 of cash flow is great but if rents decline by $400 each year I'm soon negative. Conversely, in a growing area you might expect rents to increase, perhaps even exceeding inflation. You might even be confident enough of the growth to be willing to purchase with break-even cash-flow.

Are there any location rules-of-thumb? For instance, is it worthwhile to include "metro area unemployment must be under 25%" as a rule? What other location rules are there?

I've noticed that there are bubble-prone areas and non-bubble-prone areas. The cash-flow-positive areas mentioned in this forum seem to fall into both categories. Which do people prefer? Or do people completely ignore this?

I find bubble-prone appealing, in that there's also the possibility of experiencing appreciation (which I hope isn't a dirty word here). Plus, the local economies seem more stable and thus able to support steady rents.

To summarize, cash flow seems great, but are there any rules-of-thumb that will give me confidence that the location is solid and perhaps growing?

Thanks for all the advice. No debt is a correct assumption. I may try a small bank, but I see now that these loans are apparently not common.

I went to a real estate seminar tonight and the leader suggested, firmly, that I should make all-cash offers and play that up as much as I can. In other words, try to find deals where paying cash is a strong bargaining point and gives me an edge. I'm not sure which types of deals those would be, but I'll look for them.

Update: after posting this I'm thinking maybe an advantage I could offer is a quick close. Assuming I was able to do inspections, title search, etc quickly, I could close within a few days.

As in the title, I have no income but I do have cash. Do you think I could get a loan at a reasonable rate, or am I limited to cash-only deals? It would be nice to utilize a little leverage. My FICO is around 800.

I'm interested in SFR with break-even cash-flow. Might be part of a 1031 exchange.